Achillion Pharmaceuticals (ACHN) Gets Wiped Out After FDA Maintains Hold On Its Lead Drug

Shares of Achillion Pharmaceuticals (ACHN) crashed 60% last week, after the company stated that the FDA maintained its clinical hold on its leading hepatitis C (HCV) drug, sovaprevir, which has been on hold for more than three months due to fears that it could cause liver damage. That news devastated shareholders, who had hoped that sovaprevir would compete with upcoming HCV treatments from Gilead Sciences (GILD) and AbbVie (ABBV), which analysts believe could both hit the market by next year.

All three treatments are orally administered, next-generation HCV treatments with a milder side effect profile than many existing treatments, with are injected and rely on interferon. Interferon occasionally causes flu-like symptoms. Daily Chart
In addition to sovaprevir, Achillion has three other HCV treatments - ACH-2684, ACH-2928, and ACH-3102 - but they are still all in phase 1 and 2 trials. Sovaprevir was the farthest along in development, reaching phase 2a, but now it appears that the company will have to fall back on its other treatments. Sovaprevir was put on a clinical hold in June, after the FDA noted elevations in liver enzymes, an indicator of liver damage, during its phase 1 study. If Achillion can ever get the FDA to allow sovaprevir to resume, it will arrive much later than the the treatments from Gilead and AbbVie. Not only is that window of opportunity closing, but the companyâ s losses are piling on without any kind of revenue coming in. During the second quarter, it reported a net loss of $0.21 per share, down from a loss of $0.16 per share in the prior year quarter. This was primarily caused by higher expenses. General and administrative expenses climbed 37.4% year-over-year to $3.5 million, due to non-cash stock based compensation. Research and development expenses also soared 84.5% to $16.6 million. In other words, the company spent a lot, made nothing, and now its lead drug is dead in the water. On the bright side, it still has three other drugs to try out, although there is definitely no immediate upside left for the stock now. Other News About ACHN Achillion Falls on FDA Hold on Hepatitis C Medicine Achillion plunges into the abyss. In Insider Trading, Achillion Pharmaceuticals Sees a Major Purchase Achillionâ s insiders are still buying -- should you? Other Stocks in the News Apple Hits Microsoft And Nokia With iPad Release Date Can Apple stay in the lead in the tablet market? Apple Aims To Poach BlackBerry Workers What does Apple hope to gain from hiring former BlackBerry workers? Copyright 2013 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Oct 15, 2013
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

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